The Ministry for Foreign Affairs, in cooperation with the Prime Minister’s Office, Ministry of Finance, Ministry of Business Affairs, Central Bank of Iceland and the Financial Supervisory Authority, has sent the European Commission comments on the Commission’s proposals on addressing the financial meltdown and the actions necessary to remedy the crisis.
Iceland broadly endorses the key principles and proposals for reform as set out in the de Larosière report regarding the restructuring of the financial markets supervision in Europe.
In the comments, particular emphasis is placed on the importance of equitable participation of EU/EFTA Member States, all of which are fully integrated into the single market through the EEA Agreement, in the new proposed macro-prudential financial architecture, including in the European Systemic Risk Council. Icelandic comments also highlight the need to reform the system of Deposit Guarantee Schemes and to strengthen the system of crisis management under stronger European-wide burden sharing measures, especially in cases where the impact is concentrated disproportionately on certain economies. Strong support is also voiced for legislative proposals to change the system of incentives for Credit Ratings Agencies and remuneration schemes within the scope of prudential oversight. In addition, international cooperation against secrecy laws in tax havens is underlined as an area of importance that needs to be significantly strengthened through the bolstering of supervisory and regulatory systems responsible for managing international capital movements.
The comments from Iceland were sent following the launch of a consultation process by the European Commission on 4 March requesting input from all interested parties. The Commission intends to present its proposals to the European Council of Ministers in June 2009. The proposals will be followed by specific legislative measures that will have a direct impact on Iceland through the EEA Agreement.